Monday, July 5, 2010

In my last two posts I explored the rate of new lawyer production in terms of the inverse number of attorneys per capita that could be sustained by graduation rates (expressed in terms of one lawyer for every X-amount of people) using the assumption that a new lawyer would want to practice for 40 years. Let's call this number the Sustained Inverse Lawyers Per Capita, or SILPC.

I was curious about the historical trend, so I conducted a study and was surprised to discover that the law schools have been overproducing lawyers for almost 40 years! In other words, the rate of production in terms of SLPC has averaged one lawyer for every 171.9 people since 1973. I knew that lawyer overproduction had been a problem for decades, but I had never imagined that it was this bad! I had previously assumed that the SILPC had decreased steadily over time, but apparently this is not the case.

Assuming that, on average, a lawyer would want to practice for 40 years, SILPC = Population / (JDs Awarded * 40)

Year

JDs Awarded

US Population

Inverse Lawyers Per Capita (SILPC)

1963

9,638

189,242,000

490.9

1964

10,491

191,889,000

457.3

1965

11,507

194,303,000

422.1

1966

13,115

196,560,000

374.7

1967

14,738

198,712,000

337.1

1968

16,007

200,706,000

313.5

1969

16,733

202,677,000

302.8

1970

17,477

205,052,000

293.3

1971

17,006

207,661,000

305.3

1972

22,342

209,896,000

234.9

1973

27,756

211,909,000

190.9

1974

28,729

213,854,000

186.1

1975

29,961

215,973,000

180.2

1976

32,597

218,035,000

167.2

1977

33,640

220,239,000

163.7

1978

33,317

222,585,000

167.0

1979

34,590

225,055,000

162.7

1980

35,059

227,726,000

162.4

1981

35,604

229,966,000

161.5

1982

34,847

232,188,000

166.6

1983

36,390

234,307,000

161.0

1984

36,688

236,348,000

161.1

1985

36,830

238,466,000

161.9

1986

36,122

240,651,000

166.6

1987

35,479

242,804,000

171.1

1988

35,702

245,021,000

171.6

1989

35,521

247,342,000

174.1

1990

36,386

250,132,000

171.9

1991

38,801

253,493,000

163.3

1992

39,082

256,894,000

164.3

1993

39,915

260,255,000

163.0

1994

39,711

263,436,000

165.8

1995

39,355

266,557,000

169.3

1996

39,921

269,667,000

168.9

1997

41,115

272,912,000

165.9

1998

39,456

276,115,000

175.0

1999

39,072

279,295,000

178.7

2000

38,158

282,434,000

185.0

2001

37,910

285,545,000

188.3

2002

38,606

288,600,000

186.9

2003

38,875

291,221,000

187.3

2004

40,024

293,842,000

183.5

2005

42,672

296,463,000

173.7

2006

43,883

299,084,000

170.4

2007

43,518

301,705,000

173.3

2008

43,588

304,326,000

174.5

2009

44,000

306,947,000

174.4

2010

309,565,000

From 1963 to 1970 the SILPC decreased steadily until a huge jump occurred between 1971 and 1973. The worst year was 1983 when the rate bottomed out at 161.0. Perhaps the market was able to comfortably absorb this amount of lawyer overproduction in the Sixties and Seventies. Presumably, new attorneys have suffered difficulty finding career-building entry-level jobs and earning a living practicing law since the late Seventies or early Eighties, but the Internet was not available to chronicle it. It is also possible that lawyers were more easily able to obtain upwardly mobile white collar jobs in those decades at a time before hordes of people went to college. In other words, the Law School Scam took root 40 years ago.

If I can obtain the data, I would like to plot the number of attorneys who maintained licenses every year since 1963. A plot of the data shows that JD production has outpaced U.S. population growth by a tremendous margin since 1963:

The red data in the chart above is SILPC. It has remained fairly steady since 1973 with an average SILPC of 171.9.

This last chart expresses U.S. population growth and the growth in the amount of JDs awarded as a percentage since 1963. So, a data point of 50% population growth would mean that the population had increased by 50% since 1963. A data point of 300% JDs awarded means that the number of JDs awarded that year was four times the number awarded in 1963. (A number of 0% would mean that the number is the same as it was in 1963, and a number of 100% would mean that it was double the amount in 1963.)

------- EDITOR'S NOTE -------

March 11, 2011. I want to clarify that the 40 year average lawyer-to-population ratio that new JD production can sustain (which I eventually calculated to be 1 lawyer for every 171.9 people) is NOT the same thing as the actual lawyer-to-population ratio. The number I calculated for a given year of new JD production would only reflect the actual lawyer-to-population ratio if the U.S. population remained the same for the following 40 years. This is because while the U.S. population continues to increase, the number of JDs produced in a given prior year is static and cannot increase proportionally with population growth.

Consequently, Using ABA and BLS stats, the actual lawyer-to-population ratio is about1 lawyer for every 215 people (only counting JDs minted over the past 40 years).

8
comments:

While lawyers per capita certainly is a useful stat, it's not the full picture of lawyer job market sustainability. Increases in government regulation mean more lawyers, both in the government, and in private practice either at firms or in house. Basically, they create more demand for lawyers.

What I find more interesting about this is that government regulations or not, most of what lawyers do does not build the economy. Doing work on contracts arguably helps build the economy (as much as the underlying deal does), but regulatory work does not, law suits do not, wills do not.

The increase in lawyers per capita shows that we have a lot of highly paid people who don't contribute to the economy. That's a recipe for economic disaster. I bet if you looked at the number of HR personnel and middle managers, you'd see a similar increase.

I hope you and Nando jump on this: http://www.bls.gov/k12/law02.htm, look at what it says: "How much does this job pay? Back to Top

Lawyers are some of the highest paid workers. Although some lawyers work for themselves, many other lawyers work for governments, law firms, and corporations. In May 2008, the average yearly wages for lawyers were $124,750.

How many jobs are there? Back to Top

Lawyers held about 759,200 jobs in 2008. Most lawyers worked for themselves or in law firms. Some lawyers worked for other businesses or for government." I wanted to smack the screen when I say this.

I'm sure that the average income statistic conveniently or perhaps naively only counts lawyers who work in the field and not unemployed and underemployed lawyers. Those types of career summary pages are normally worthless wastes of space written by laymen who know nothing about the field they're describing.

Nice find with the 759,200 stat.

"Lawyers held about 759,200 jobs in 2008."

It doesn't say what kinds of jobs or if they were legal jobs. If you take the data and add up the number of JDs produced in the 40 years from 1969 to 2008, then 1,412,328 lawyers should be in the job market, assuming that a lawyer would want to work for 40 years on average. According to the ABA licensure stats for 2008, there were 1,162,124 "resident and active attorneys".

I think I'll make a blog post to hash out some data from those numbers.

I graduated from Law School at the University of Denver in 1983. The economy was terrible then,particularly in boom or bust states, but not as bad as now. When I was a first year, I bought running shoes from a guy who had just graduated from law school in Kansas and moved to Denver to live with his wife's family and look for work in the "big city." One of my friend's husbands went to Harvard Law but decided to move out west for the "quality of life." I recall being one of a few people who had job offers after my second year. I ended up being moved to New York City by Mobil Oil Company. I moved from there to an associate at a big law firm. Many of my friends struggled for years to get careers going. Many of them never made it, I was lucky.

The big difference was that my law school tuition, which I worked to pay for while in school, was about $8,000 or so a year - less with scholarships.

My student loan payment was less than $300 a month. (I went to a local state university and lived at home so I wouldn't incur debt because I knew I wanted to go to graduate school.)

Honestly, I was so financially conservative and worried about debt - because my parents, products of the depression, had no money to help me out- I don't think I would have gone to law school if the price tag meant I had to accumulate a staggering amount of debt.

Also, I grew up in a small town in the Midwest and never really thought about making staggering amounts of money. We had just been through a serious recession and oil crises. People where I lived didn't have access to, or real knowledge of, big law. I didn't even know about big firms until I was moved to New York.

I would never let my son go to law school unless we worked out a way to pay for it in cash and scholarships. No one should take on $200,000 in debt they can't walk away from if things don't work out right.

I didn't realize how bad life was for many law students until I read some of these scam blogs.

I wanted to add that you should do a chart that shows how the cost of law school has gone up and the amount of debt needed to pay for it since 1983, or any other date you choose.

I also neglected to mention that in 1983, there were jobs to be had that you could support yourself on, even selling shoes. And people were hiring for jobs, though as I said, the economy was in a recession then as well.

A third point, when I went to law school it was the first time the class had been half women. When I graduated, companies were under government pressure to show they had women in highly paid, managerial positions. Hiring women lawyers was one of the fastest ways to improve their standing.

Finally, many companies then had the idea of building a great in-house law firm instead of using outside lawyers all the time.

I tried to use the same reasoning as the author and found out I was wrong to use statistics that way. You can't compare new lawyers to overall population. You have to compare ALL lawyers to overall population.

See here: http://www.jdunderground.com/all/thread.php?threadId=43687#post621585